On Friday, the Securities and Exchange Board of India (Sebi) clarified that investors can continue to use 3-in-1 accounts to apply online for public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities, and securitized debt instruments. This option is in addition to the existing application methods, according to a circular released by Sebi.
A 3-in-1 trading account integrates a savings account, a demat account, and a trading account into one seamless solution. This allows clients to keep their funds in a bank account while earning interest on the cash balances.
The clarification from Sebi came after they received feedback highlighting the need for explicit guidelines regarding the use of 3-in-1 accounts for applying to public issues of the mentioned financial instruments.
Last month, Sebi’s board approved a proposal stating that, starting February 1, 2025, qualified stock brokers (QSBs) will offer either a trading facility supported by blocked funds in the secondary market (known as an ASBA-like facility) or the 3-in-1 trading account option.
With the UPI block mechanism, clients can trade in the secondary market using blocked funds in their bank accounts instead of needing to transfer funds upfront to their trading member.
QSB clients will have the choice to either stick with the traditional method of transferring funds to trading members or switch to the new facility.
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